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Posted on 03/04/2009 11:31:16 AM PST by rabscuttle385
A bill to end cost overruns in major weapons systems would create a powerful new Pentagon position -- director of independent cost assessments -- to review cost analyses and estimates, separately from the military branch requesting the program.
Those reviews, unlike in the current process, would take place at key points in the acquisition process before a weapons program can proceed, according to legislation sponsored by Sen. Carl M. Levin (D-Mich.) and Sen. John McCain (R-Ariz.)
Last year, the Government Accountability Office reported that cost overruns on the Pentagon's 95 largest weapons acquisitions system totaled about $300 billion, even though the government cut quantities and reduced performance expectations.
"A train wreck is coming," McCain said at a hearing yesterday on the bill.
The bipartisan legislation would also enable the Pentagon to pull the plug on a weapons project that has a critical cost overrun unless the Defense Secretary certifies, with reasons and documentation, that the program is essential to the national security and can be made cost-effective.
(Excerpt) Read more at washingtonpost.com ...
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How bout cost-overruns on these bailouts?
To be followed shortly by a newer, more powerful Pentagon position --Vice President of the Director of Independent Cost Assessments.
Absurd but not surprising.
For your review and discussion
The Cause of Military ‘Overruns’
WaPo Tuesday, March 3, 2009; A12
The Feb. 24 news story “Marine One Upgrade Now Looks Less Likely,” on the proposed new fleet of presidential helicopters, cited a Government Accountability Office report that found overruns of $300 billion on the 95 largest military programs.
The frequent use of the word “overrun” in connection with military contracts is a gross misnomer that gives the impression that contractors routinely underestimate the cost of a task. There are several reasons for cost overruns, most of which have nothing to do with lowballing by a contractor. On fixed-price procurements, the contract is given to the lowest responsive, responsible bidder. This means that the proposal must address the government’s requirements and related specifications. It also means that the contractor must prove that it has the talent, facilities and financial strength to perform.
Final costs above the original contract amount often arise from changed or additional contract requirements, inflation, and government funding limits placed on a program at the time the contract is issued, none of which represent failure on the contractor’s part.
This is not to say that there are not true overruns — certainly there are — but to include all contract increases in one $300 billion lump does a disservice to the many government contractors and gives the public a distorted view of the true picture.
W.B. CAVANAUGH
Ellicott City
The writer retired in 2002 as managing partner of Cavanaugh Associates, which provided consulting services to government contractors.
Indeed, if McCain wishes to be consistent, he should urge the establishment of the like in every department.
Senator John “Big-Government Solutions” McCain at it again!
Jabba the McNutt is at it again.
What they need are a Team of Ford Motor Purchasing folks to hold down costs. I know what you are going to say but at least Ford didn’t take the Bail out money.
/ s
Wonder what Darlene is doing these days?
There are a million reasons why there are cost overruns.
Often, the specs change from the original bid time, and those specs change during the construction.
Think in the terms of building a house:
You are the contractor—you have signed a full bid contract, with provisions for Change Orders. Those change orders can often run the cost of a house up as much as 80%.
Re-arranging where you want the kitchen- dining room- adding a solarium- whatever the home owners want to upgrade/rearrange/change dimensions of are costs that make a contractor nuts, and the home owner never can quite figure out why their dream home costs so much more than they planned.
Bids are placed way ahead of planned usage of a weapons system. In the drafting-engineering phase, and often into the production phase, newer and more technological items come on the market, and the government wants to add.change stuff.
Then they cry foul when the manufacturer wants more money.
The same geniuses making these decisions are the same politicians who think they are engineers who can build a car in Detroit.
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